PPC( Pay per click) is a paid advertising service provided by internet search engines like Google, Yahoo etc. If you sign up with these search engines for PPC advertising, these search engines display your advertisement whenever internet visitors type in the keywords/keyword phrases relevant to your advertisement. Your advertisement and your web url are displayed prominently before the organic search results in search result page. They are typically displayed at the first or second position before the organic search results or on their right side. In the picture below, we can see the advertisements that are displayed on the right side for the search keywords ‘excavator spare parts’.

Thus there is a high likelihood of the visitor visiting your website in the PPC advertising model. Whenever the advertisement appears in the search result page, it is called as an ‘impression’. Whenever a visitor enters your website by clicking on the web url through the search result page, it is called as a ‘click’.

Typically the search engines charge you according to the number of actual clicks ie the number of visits to your website through the search results page.

There could be competition between players in the same industry or domain for display of their advertisements. In this case which advertisement gets priority in the display queue? This issue is sorted out by a process called as ‘bidding’. The advertiser whose bid for displaying advertisements for a particular phrase of keywords is higher gets a higher priority in the ranking of the advertisement.

PPC is also called as Search Engine Marketing(SEM ). We will refer to Google AdWords as the SEM tool in this post.

It is obvious that the effectiveness of your advertising campaign on an SEM tool would be more if you get more clicks and final conversions. Targetting a set of customers which are more likely to convert to your product or service increases the ROI of your PPC advertising campaign. In this post, we will find out how to target customers more likely to convert to your product/ service based upon their geographic location.

Basic Geographical targeting

In Google AdWords, there is a provision for selecting locations where you want to display your advertisements. There are various options for selecting geographies- countries, parts of countries or a radial area around a particular location.

This is basic geographical targeting. In the picture below, the advertiser has selected the states of Maharashtra and Karnataka for his AdWords Campaign.

Location extension

Google AdWords has a feature called location extension. This feature is particularly useful if you have a particular place of business and want your customers to visit your location. This feature shows your place of business with address and contact details on a map. In Mobile devices, it also shows directions to your location thus encouraging people to visit your location. This is a powerful tool as Google AdWords shows your advertisements to people who are close to your location as they are more likely to visit your location. This is another method of geographical targeting.

Advanced geographical targeting( Geo Bidding)

There could be some locations that could be more precious to you in terms of conversion. Naturally focusing your advertising campaign in such locations would be more beneficial to you. In such cases, you can increase your bid for these locations so that your advertisement is displayed more frequently to users from such locations. This changing bids in Google AdWords based upon certain segments( like geographies, devices, times etc.) is called ‘ bid adjusment‘. Bid adjustment works in percentages and you can set a higher bid if you want your advertisement impressions to be displayed more frequently. Eg. If you deal with winter clothing, then you will target higher altitude areas for more exposures of your advertisements. You will bid higher for such locations, so that when users from these locations are browsing the internet, your advertisement will be displayed more frequently.

Bid adjustments also work in combination with multiple factors like location, time, type of device etc.

Location bid adjustment

How do you know which locations are more precious to you so that you adjust your bidding for these customers?

Web Analytics comes to our help here. There are several tools available in Google AdWords to devise geo bidding strategy.

Review performance by location

In Google AdWords, you can get a location report that shows performance of your campaign in different locations. Performance is measured by various metrics like no. of clicks, total business generated, average position, cost per unit of business generated. Thus based upon these metrics, it is very easy to decide location performance of your advertising campaign. You can clearly find out ROIs per location for your advertising campaign. Based upon this data you can do bid adjustment. Please refer the picture below.

Location bid adjustment

Based upon performance, you can see that in some areas the cost per action( CPA) is low and business volume is high. That means that this geography is responding well to your advertising campaign. In this case, you can increase the location bid. The graphic below shows a location bid adjustment strategy.

Adjust for localized business

If your business is localized, people in closer proximity to your business location are more likely to buy from you. In that case, you can start a search campaign for people who come within a certain radius of your business location. Whenever potential customers search the keywords within the set radii, advertisements are shown to these customers with guidelines to reach your location. You can get further analytics for conversions rates and other data for different radii. See picture below.

We saw a few techniques for geo bidding and geographical targetting. There are further advanced options that Google AdWords provides that can help your geo bidding. You may refer Google Adwords for these techniques. We can conclude that geo bidding has been simplified because of such features provided by search engines.